Echostar To Push for Baseball-Style Arbitration for Fox Retrans Deals

Look for Echostar, joined by consumer groups, to push the FCC to retain baseball-style arbitration for Fox broadcasting retransmission-consent deals.

When News Corp. bought DirecTV in 2004, one of the conditions on the deal was that negotiations for broadcast carriage between Fox Broadcasting stations and satellite competitor EchoStar be subject to baseball-style arbitration if an impasse occurred, during which stations could not go dark on the satellite service.

Baseball-style arbitration is when both sides make their best offer and the arbitrator has to pick one or the other.

The condition was in place so that Fox couldn't advantage co-owned DirecTV by refusing to deal with its satellite competitor. Arbitration was invoked only once, according to a source, with the parties accepting the deal without appealing to the FCC, which was an option.

Now that News Corp. is trading its stake in DirecTV to Liberty Media for Liberty's stake in News Corp., the latter is, understandably, asking to drop the arbitration requirement.

Getting the FCC to preserve the condition would be a long-shot at best since, but with the transfer of Liberty's stake in News Corp's broadcast stations before the commission as part of the switch, the FCC could conceivably consider it.

The issue of viewers' access to TV stations over multichannel video providers is a hot topic before the commission at the moment given the Mediacom/Sinclair retrans battle. The FCC's Media Bureau, in denying a Mediacom complaint against Sinclair alleging bad faith bargaining, has said it would prefer the parties submit to Media Bureau arbitration and put Sinclair stations back on the cable systems. Sinclair pulled its stations from Mediacom systems serving 700 Jan. 6.

The issue could heat up even further as broadcasters flex their programming muscles and ask for more money for their channels. CBS, for one, has pledged to get more in return for its TV station signals, which are marquee programming for cable and satellite but have historically not fetched the same price as similarly-rated cable nets, a point Sinclair has made in its ongoing retrans fight.

According to a source, Echostar will also point to program-access issues raised by the ties of DirecTV to cable programming via Liberty Chairman John Malone, who personally owns half of Discovery. Look for it to encourage senior Democratic staffers to make sure the issue is raised at an FCC oversight hearing Feb. 15 in the House energy & Commerce Committee.